Finance Committee - 11/18/2020 Page 14
Mayor Donchess
It’s $25.
Fred Teeboom $25,000.00 if any change order comes back to this Committee, you are going to have a lot of
change orders on this job. Plus you got all the contingency. You got $1 million dollar, | think Tim mentioned it
but the estimate that | have that goes back to January, I’m not been part of the later estimates. There was an
oldest contingency, there is an oldest contingency of $1 million dollars. That’s a lot of contingency on a $25
million dollar job. On top of that and | have argued this, there’s an endowment fund valued at $1.2 million
dollars. You don’t need a $1.2 million dollar budget endowment fund because the operator spent the
management's the operator manages, operates for $1.00 a year. So the $1.2 million dollars could also serve
as a back up in case you need it. That’s up to the Steering Committee and | presume that comes back before
the Finance Committee. So that’s $2 million dollars of potential contingency. Perhaps the manager, aside from
the escalation has a $800,000.00 contingency in case he has problems. Now does that money come back to
the owner? | don’t think so, in the guaranteed maximum price, unless you negotiate in terms of savings you’ve
got a $15.8 million construction job. Let’s say things are fantastic and it comes in $14 million. Like the Broad
Street Parkway came in low budget at the time because the costs were down. The construction manager
keeps the money unless there is a sharing provision in the contract. I’m not aware if there was ever arranged a
sharing - if not you may want to address that like there’s a savings of $1 million dollars, the contractor could
say the owner gets half of that, half a million and the project manager gets half a million. So these are all, none
of this stuff is fixed; these are all negotiated items. Just like every change order is going to be negotiated.
| should also say that the fee is quite reasonable, | think that the focus and fee on this job the 8% focus and fee
is a reasonable fee. And a final point is the guaranteed maximum price, why would the contractor do a
guaranteed maximum price, | mean why not just cost plus fee. Most military contract people complain about
an all cost plus fee, the more you spend the more you get in fees. That’s the whole point about a guaranteed
maximum price; you put a maximum fee on this thing, you cannot go over that price unless really, you know
through change orders, they all have negotiated. And my final point is, you’ve got a $25 million dollar project,
you’ve got about a $16 million dollar construction job, you have got $9 million dollars left over for everything
else. This project should never go over $25 million; if this goes over $25 million Mayor, somebody ought to get
shot. Thank you.
Mayor Donchess
Alright, thank you Mr. Teeboom.
Director Cummings
Mr. Mayor, I’m sorry, but there are a couple things | do think | should correct.
Mayor Donchess
You are breaking up a little. Tim, are you still on here? You were breaking up?
Director Cummings
I’m sorry, Mayor. Can you hear me now?
Mayor Donchess
| think we can hear you now, yeah.
